The Month Where Gas Prices in MN Are the Cheapest Might Surprise You
Gas prices have mostly stabilized locally for the past couple of weeks. St. Cloud State Economist and Dean, School of Public Affairs King Banaian joined me on WJON today. He says October is the month where we typically see the cheapest gas prices. Banaian says he expects a small drop in gas prices this month before they go back up a bit in Minnesota in November when the switch to the winter blend happens. He says gas prices typically drop a bit in January after the holiday travel season but a larger dip in prices happens in the spring in the months of March and April.
I asked Banaian why we see a difference in gas prices in different locations in Minnesota. He says it all comes down to the distributer's price. He says gas stations legally need to mark up the price per gallon by a minimum amount. The wholesale distributor sets the prices and the distributer, for example in southern Minnesota, could be different than the one that distributes to Central Minnesota. Based on that the price can be different. Banaian says distributors selling at different prices is likely a function of demand and which distribution chain each gas station is a part of.
Each community typically has a gas station that sets the price for that community. Banaian says stations see what other stations are doing and most of the time fall in line around the same price to remain competitive. He says some stations may set their price cheaper to lure people in to buy things in their store. Banaian says that's why bigger box stores that sell gas will sell it for less to get sales of other things inside the store they are offering.
If you'd like to listen to my full conversation with King Banaian it is available below.